• by Wendy Davis , Staff Writer @wendyndavis, March 19, 2009

News organizations have long taken as gospel the principle that truth is an absolute defense to libel. That is, no matter how mean-spirited, if a statement is true, it can be published.

But a recent decision in a lawsuit in Massachusetts has cast doubt on that proposition. In the case, a federal appellate court in Boston ruled that Staples can be sued for libel for having sent around 1,500 employees an allegedly malicious -- but true -- email about former company salesman Alan Noonan. This week, despite attempted intervention by dozens of news organizations, the appeals court refused to reconsider that ruling.

Staples fired Noonan in January 2006 for allegedly padding expense reports, according to the court's opinion. The company then notified employees via email that Noonan was fired for violating the company's travel and expense policy.

Noonan denied that he ever tired to bilk Staples out of money, but acknowledged that he used a personal credit card rather than a company credit card and didn't always book travel through Staples' official travel agent -- which were technical violations of company policy.

Still, Noonan sued for libel on the theory that the email implied he had been dishonest. While his expense reports had some errors -- on one occasion, he submitted an expense of $1,129 for a lunch at McDonald's, rather than $11.29 -- he said in his lawsuit that he made more mistakes in Staples' favor than his own. In fact, he alleged, an internal audit revealed that Staples owed him around $1,200. (When Staples fired Noonan, the company claimed that Noonan owed around $4,800, according to Noonan's original complaint.)

Staples argued that Noonan's lawsuit should be dismissed because he was indeed fired for violating company policy, as the email stated. A trial judge agreed with Staples and tossed the case.

But the appellate court reversed. In a ruling that shocked much of the publishing world, the First Circuit Court of Appeals held that Noonan could proceed with his lawsuit because an old Massachusetts law allows people to sue for statements made with "actual malice" -- even if they're true.

Many observers had assumed that the law -- which dated to before the Civil War -- was unconstitutional in light of 20th century Supreme Court decisions holding that statements aren't libelous if they're true.

Noonan asked the First Circuit to reconsider the ruling, as did a coalition of dozens of news organizations and other advocacy groups. This week, the First Circuit refused to do so, on the ground that Staples didn't originally argue that the case raised constitutional issues.

"Staples did not timely argue that the present matter was a matter of public concern or that the statute was unconstitutional as applied to a matter of private concern," the court wrote.

This result is extremely unfortunate -- and not only for news organizations. All publishers in Massachusetts -- including bloggers, consumers, or anyone with access to email; in other words, all Web users -- might now end up hauled into court for publishing completely truthful statements.